Berkeley's Tenant Buyout Ordinance
The City of Berkeley’s Tenant Buyout Ordinance (Berkeley Municipal Code Chapter 13.79) establishes specific procedures and protections for tenants when landlords offer compensation in exchange for the tenant’s agreement to move out voluntarily.
What is a Tenant Buyout
A tenant buyout agreement is any written or oral agreement in which a tenant agrees to permanently vacate a rental unit in exchange for money or other consideration from the landlord. These agreements are legal in Berkeley, but only if certain rules are followed.
Who is Protected
The ordinance applies to any tenant who is protected by Berkeley’s Just Cause for Eviction rules. This includes tenants in:
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Fully covered rent-controlled units
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Partially covered units such as single-family homes and condos with tenants who have lived there for 12 months or more
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Newly constructed units that are exempt from rent control but still subject to Just Cause
The ordinance does not apply to:
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Units that are exempt from the Rent Ordinance, such as owner-occupied Golden Duplexes or qualifying ADUs
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Agreements that are part of a court settlement in an unlawful detainer (eviction) case
Landlord Requirements Before Making an Offer
Landlords must meet the following requirements before initiating a buyout conversation with a tenant:
Provide the City-approved Disclosure Form
Before making a buyout offer, the landlord must provide the tenant with the Tenant Buyout Disclosure Form created by the Berkeley Rent Board. This form informs tenants of their rights and options.
Avoid informal or verbal offers
Even casual discussions about a buyout are regulated. The ordinance treats all buyout offers, including verbal suggestions, as formal offers once the disclosure requirement is triggered.
Requirements for a Valid Agreement
Once both parties agree to a buyout, the following rules must be followed:
Include mandatory rescission language
The written agreement must include specific language stating the tenant’s right to rescind the agreement within 30 days of signing. If this language is not included, the agreement is not valid.
Allow 30 days to rescind
Tenants have the absolute right to cancel a signed buyout agreement for any reason within 30 days after all parties have signed.
File the agreement with the Rent Board
After the 30-day rescission period expires, the landlord must file a copy of the signed agreement with the Berkeley Rent Board within 60 days. If the agreement is not filed on time, the tenant may void the agreement at any point in the future.
Public Record and Confidentiality
The Berkeley Rent Board keeps buyout agreements on file as public records, but personal identifying information is kept confidential. The Board periodically publishes anonymous data about buyout trends across the city.
Best Practices for Landlords
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Always deliver the disclosure form before discussing any offer
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Never pressure tenants to waive their rights or rescind early
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Include all required language in writing and allow tenants to review
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Keep copies of signed disclosures and agreements
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File with the Rent Board within the required timeframe
This is a Legal Minefield. Do Not Navigate It Alone.
Tenant buyouts may seem straightforward, but the legal requirements are strict and failure to comply can result in the agreement being voided long after the fact. From required disclosures to rescission timelines and filing deadlines, even a well-meaning landlord can make costly mistakes.
If you are considering offering a tenant a buyout, contact BPOA for guidance. We can refer you to an attorney who is experienced in Berkeley’s Rent Ordinance and knows how to draft legally sound agreements that protect your interests and comply with city law.